Earnings Outlook
Vodafone Idea's net loss to deepen in Apr-Jun
This story was originally published at 18:28 IST on 2 August 2024
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By Apoorva Choubey
MUMBAI – Cash-strapped Vodafone Idea Ltd is expected to remain loss-making during Apr-Jun, for the 24th quarter in a row. The telecom services provider is likely to report a consolidated net loss of 80.47 bln rupees for the quarter, according to the average of estimates given by four brokerages.
The company reported a net loss of 76.75 bln rupees for Jan-Mar and 78.4 bln rupees for the June quarter a year ago. The estimates for the bottom line were in the range of 74.9 bln rupees and 86 bln rupees.
The company's consolidated revenue may remain unchanged from a quarter ago at 105.87 bln rupees during Apr-Jun, the estimates showed. When compared year-on-year, the top line is seen 0.6% lower. The highest projection for revenue was 106.18 bln rupees while the lowest was 105.29 bln rupees.
The main reason for the company's weak performance continues to be subscriber loss, which has been the case for the past few years, ever since Reliance Jio Infocomm disrupted the telecom industry in India with its competitive pricing. Kotak Institutional Equities expects Vodafone Idea to have lost 3 mln subscribers during the June quarter, taking its total customer base to 209.6 mln. The company lost around 3 mln subscribers during Jan-Mar.
The loss of subscribers, and higher network expansion costs, will weigh on the company's earnings before interest, taxes, depreciation, and amortisation. The operating profit for Apr-Jun may fall 1.7% on quarter to 42.6 bln rupees.
Vodafone Idea's EBITDA margin for the June quarter is seen contracting 70-110 basis points sequentially from the 40.9% profitability seen during Jan-Mar. The fall in profitability is expected to be limited by better average revenue per user, which is seen improving over 1% on quarter from 146 rupees to 148 rupees per month.
Investors will keep an eye out for the company's comments on the pricing environment, addition of network capacity, rollout of new 5G offerings, and plans to reduce subscriber attrition and cut debt. Vodafone Idea recently raised tariffs for its prepaid and postpaid consumers by 10-23% and investors will want to know how much this would benefit the company.
The company has not yet announced the date for detailing its results. Today, shares of the company closed almost 1% higher at 16.12 rupees on the National Stock Exchange.
Following are the Apr-Jun earnings estimates for Vodafone from four brokerage houses, in million rupees:
| Brokerage | Net sales | Net Profit | EBITDA |
| Kotak Institutional Equities | 106,183.00 | -74,890.00 | 42,249.00 |
| Motilal Oswal Financial Services Ltd | 106,000.00 | -80,000.00 | 42,000.00 |
| Nomura Equity Research | 106,000.00 | -81,000.00 | 44,000.00 |
| Nuvama Wealth Management Ltd | 105,294.00 | -86,007.00 | 42,290.00 |
| Average | 105,869.25 | -80,474.25 | 42,634.75 |
End
Edited by Rajeev Pai
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